You could potentially face two different fees when you use a debit card to withdraw money at an overseas ATM: a fee charged by your own bank and a fee charged by the operator of the ATM. Fortunately, there are ways to avoid both of these charges. You’ll need to apply for a debit card with a bank that belongs to an international ATM alliance and you’ll need to only withdraw cash at ATMs within the alliance.
ATM fee from your bank. Many banks and financial institutions apply a fee when you use your debit card to withdraw money from an overseas ATM, and is typically called a nonbank usage fee since you’re using a bank different from your own. This charge tends to be a flat fee between $1 and $5, plus some may charge a percentage of the amount you withdraw (usually 2.5 to 3.5%). Some banks will waive the ATM fee if you withdraw from ATMs belonging to their global alliance.
ATM operator fee. The local ATM operator may also charge a fee for use of the ATM. While it varies depending on the country, you could pay a similar fee to that your bank charges: anywhere from $1 to $5, plus some may charge a percentage of the amount you withdraw (usually 2.5 to 3.5%). This fee will typically be shown on the screen before you make a transaction, or could be shown as a physical sticker on the ATM. You may also pay a conversion fee to the ATM operator, which covers the cost of converting the currency.
More charges you might face
Although you won’t incur these fees while withdrawing money from an ATM, you could potentially face a currency conversion fee or a foreign transaction fee when using your debit card to pay at a debit/credit card terminal.
Currency conversion fees. You can easily avoid paying a currency conversion fee by always paying in the local currency. Some debit/credit machines will ask if you’d like to pay in the local currency or Canadian dollars. Always choose the local currency to avoid currency conversion fees and let your own bank do the conversion for you.
Foreign transaction fees. Some debit cards don’t charge a foreign transaction fee, however some will. This fee, which is typically 2.5% of your transaction, is added onto your purchase amount and is charged when you make purchases in a foreign currency.
Exchange rates. Since you’re converting your Canadian dollars into the local currency, you’ll face the exchange rate – which can fluctuate daily. There’s no way to avoid the exchange rate, but you can monitor it and withdraw cash when it’s more favourable.
Debit cards with no overseas ATM withdrawal fees
Scotiabank and Tangerine belong to the Global ATM Alliance. This alliance includes over 50,000 ATMs in over 40 different countries worldwide. Aside from Scotiabank and Tangerine ATMs, the Global ATM Alliance also includes ATMs from the Bank of America, Barclay’s, Barclays Africa Group, BNP Paribas, Banca Nazionale del Lavoro, Deutsche Bank and Westpac. If you use your Tangerine or Scotiabank debit cards overseas at these brands of ATMs, you could avoid paying any ATM fees.
Some of the ‘Big Five’ banks (TD, RBC, BMO and Scotiabank) offer VIP or premium banking packages that offer free overseas ATM withdrawals (the fee is waived). While this can save you from paying an ATM fee, you’ll likely have to pay for this type of premium banking experience.
Using your debit card overseas
You can use your everyday Canadian debit card to withdraw money from an overseas ATM. Check your debit card product disclosure statement or call your bank for more information on any charges that may apply overseas.
To avoid paying ATM fees, you’ll need to use a debit card that belongs to an international ATM alliance (and withdraw only from branded ATMs that belong to the alliance). Note that you’ll still face the exchange rate when you use your debit card to withdraw money overseas.
What to consider when using your debit card overseas
It’s important to keep the following factors in mind when using your debit card to withdraw funds overseas:
Daily withdrawal limits. You’ll likely have a daily withdrawal limit set on your debit card. Check with your provider for specific information on your withdrawal limits. If you need access to a higher withdrawal limit, contact your bank and request an increase.
International ATM alliance networks. Some banks, such as Tangerine and Scotiabank, belong to an international ATM alliance. This alliance extends to many countries around the world and allows you to get cash out overseas without paying an ATM withdrawal fee.
Where you’re travelling. You’ll want to make sure you can access ATMs on the global network in order to avoid paying any ATM fees. If you’re travelling to a country where your bank doesn’t have a partnership with any banks, you may be out of luck and have to pay the fees. If you do find that there are ATMs on the network in the country you’re visiting, you’ll need to use your card at specific branded ATMs to avoid the fee – you can’t just use any ATM you want.
Exchange rates. Remember that exchange rates will apply whenever you withdraw a foreign currency using your Canadian debit card. This rate fluctuates daily and could have a major impact on your account balance and the total cost of any fees applied. Check with your bank to find out when exchange rates are updated so that you can factor them into your budget before and during your trip. It always helps to know the exchange rate of Canadian to the local currency, whether you’re using cash or a credit or debit card.
Other alternatives for overseas ATM withdrawals
If you don’t have a debit card that belongs to an international ATM alliance, you could avoid ATM fees by using:
Credit cards. You’ll want to avoid using your credit card to withdraw cash from an ATM as you’ll face an immediate cash advance interest rate on the amount withdrawn as well as a cash advance fee. You can, however, use your credit card to pay at debit/credit card terminals, but you’ll need to watch out for both foreign transaction fees and currency conversion fees – both of which can easily be avoided by choosing a no foreign transaction fee credit card and always paying in the local currency.
Travel cards. Travel cards are prepaid debit cards that allow you to load and spend money in a range of foreign currencies. These cards help you avoid foreign transaction fees, as well as cash advance fees and interest charges since they’re preloaded with money. These cards also allow you to lock in exchange rates before you go, which can help with budgeting for your trip. There are some travel cards that have no overseas ATM withdrawal fees, but it’s important to check the charges that apply for different cards before selecting one. Keep in mind that some fees may apply like card reload fees.
Foreign currency. You can avoid credit or debit card fees completely by exchanging cash in the local currency wherever you go. Cash can be exchanged at an authorized foreign currency outlet in Canada or overseas. Many banks, for example, allow you to buy foreign currency, as do agencies such as Travelex. It’s usually recommended that you take at least some foreign cash with you to pay for purchases or services that don’t accept debit or credit cards – but it’s not wise to carry too much cash in case it becomes lost or stolen. But if you run out of cash, you’ll need to get more – which means withdrawing from an ATM.
Travellers’ cheques. Although they’re becoming much less popular, travellers’ cheques can be used as an alternative to cards or cash in some overseas locations. This travel money option allows you to get a specific amount of money in the local currency, and can easily be replaced if lost or stolen. Keep in mind that travellers’ cheques are only accepted by certain merchants overseas, which limits your options for paying with them.
It’s a good idea to take a variety of different travel money options with you when you go overseas so that you have flexibility and security wherever you go in the world.
While you can take a debit card that belongs to an international ATM alliance, you probably can’t avoid all the costs that you might incur such as the exchange rate. Before you travel, contact your bank to understand the range of different fees that may be applied.
There are other ways to access money when travelling overseas, including using travellers’ cheques or taking cash. Knowing that there are other options available to you means that you can choose a convenient and affordable way to access money that suits your needs when you’re travelling overseas.
Frequently asked questions
Yes. You should always let your debit and credit card providers know that you will be travelling overseas. You may be able to notify them online by signing in to your online banking and navigating to the “Travel” section (or similar), where you can generally list where you are going and the dates you will be gone. Alternatively, you can visit a branch in-person or call to notify them of your plans.
Each bank or financial institution has its own set of fees and charges, as well as its own way of applying them. For more detailed information, you will need to read the terms and conditions associated with your individual bank account. Alternatively, you can contact your provider to find out more information.
Yes, you’ll be charged a fee if the ATM doesn’t belong in your banks’ network – whether you’re overseas or in Canada. This fee is usually anywhere from $1 to $5, with some banks charging a fee on the lower end when the withdrawal is made in Canada as opposed to internationally.
Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog.
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